Procurement & Supplier Innovation - SIG · Innovation Value: Roche Clive Heal Innovation ......

Driving and Measuring

Procurement and Supplier

Innovation Value:

Roche

Clive HealInnovation Center Leader

6 Years Learning in Minutes

Roche

Driving & measuring Procurement & Supplier Innovation value

Clive R Heal, Roche, Innovation Centre of Excellence, ICE

18 October 2018

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Driving & Measuring the Value of Innovation Agenda

Innovation & Value

Key elements of a Procurement & Supplier Innovation program

Increasing Supplier Innovation

Measuring the Value of Innovation initiatives: Value Statements

Fast Forward to the future

Innovation & ValueDefinitions

“Something”

“new”

“that creates Value”

= process, product/service, information

= to this activity, (Core)

= to the company, (Adjacent)

= to the world, (Disruptive)

= in the eye of the beholder

“Something new that creates Value”

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Exp

lore

Dev

elo

pLa

un

ch

Research

Implement

Create

Plan

Challenge

Evaluate

Implement

Research

Create

Challenge

Evaluate Plan

Key elements: Process

• Define Roche/Partner business needs

• Identify potential areas of opportunity

• Early collaborative development of innovative ideas

• Develop action plan for implementing all newly created ideas

• Quantify potential value

• Hard probing of strengths and weaknesses of ideas

• Quantify potential risks

• Identify ideas that meet business needs and deliver high net value

• Approved ideas jointly implemented

• Commercialize using standard business processes

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ICE uses a defined Innovation process based on Disney’s creativity strategy

Value Creation Agents leverage Roche and Partner subject matter experts

RocheVCA

Partner VCA

BluePublic DomainBKey elements: People

Focus Innovation on the processes, products & services

with the greatest value creation potential

Key elements: Innovation focus

Develop an Innovation portfolio for both short & long term value

Key elements: Portfolio

Business Issue resolution trumps New Value opportunities

Key elements: Innovation targets

Build trust and commercial intimacy through open collaboration

Increasing Supplier Innovation: Supplier trust

Look for mutual value creation opportunities

Increasing Supplier Innovation: Mutual Value

Measuring the Innovation “Program” & “Initiatives”Success indicators, Enablers, Value outcomes

Indicators of success

EnablersValue

outcomes

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Measuring the Value of Innovation InitiativesSuccess indicators, Enablers, Value outcomes

Value outcomes

Enablers

Indicators of success

Business issue resolved or New Value Opportunities delivered

Core, Adjacent & Disruptive ideas generated

Participant excitement & upward selling

Clearly defined & enticing Innovation Challenge statements

Active business participation in the process

Business Case approval processes

Innovation Business Case approved, launched & implemented

Value Statements defined & delivered

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Typical Innovation Value TypesExamples of Business focus areas

Risk reduction

Cost reductions

Customer benefits

Speed/ time improvements

Revenue growth

Headcount efficiencies

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Implementing Innovation Value metrics How to create Value Statements

Value Types

• Identify potential Value Types

• Ensure meaningful to the Business Partner

• Ensure measurable by Finance

Baseline, Target, Date

• Define the Baseline level

• Agree the Target level

• Define the Date to achieve the Target level

Business Case

• Include Value Statements in the Business Case

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Fast forward to the future

The end of “Procurement”, (move to Business Value Creation & Management)

Manage the Total Cost & Drivers of Business Value through Innovation, (external & internal)

Strategic Alliances between Companies & trading of external Partners

Significant automation, (sourcing, negotiations, contract management, resource allocation, analytics & insights, supplier interactions)

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Doing Now What Patients Need Next

• Cost: Reduce the purchased price of Chemical A from $X to $Y per liter, by 31st Dec 2018

• Speed/Time: Reduce the average cycle time to create a new CRO contract from 26 to 10 business days by the 20th June 2019

• Headcount: Reduce the FTE’s required to perform 100 supplier quality audits per year from 5 to 4 by the 30th Sept 2019

• Risk reduction: Increase the number of approved suppliers for packaging component A from 1 to 3 by the end of 2019

• Quality: Reduce the number of rejected vials on the production line from 3% to 1% by 30th Oct 2019

Value Statement examplesBaseline level, Target level, Target date

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Presenter

Roche

Clive Heal

Innovation Center Leader

heal.clive_r@gene.com

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